Bradford & Bingley lines up consents to call 2¾% bonds, 4 7/8% bonds

By Susanna Moon

Chicago, Feb. 11 – Bradford & Bingley plc said it has received the needed consents to amend its CHF 250 million 2¾% series 7 covered bonds due October 2018 and its €1.25 billion 4 7/8% series 14 covered bonds due June 2017.

Bondholders representing more than two-thirds of the series 7 covered bonds and the series 14 covered bonds have submitted votes to amend each series of notes as of 5 p.m. ET on Feb. 10, the early tender date, according to a company update.

As a result, both meetings set for March 1 in London are expected to be quorate, the company noted.

Bradford & Bingley is asking holders to approve adding a new condition to the note terms that would allow the company to redeem all but not only some of the remaining bonds at an amount equal to the purchase price less the early premium plus accrued interest, according to a previous company announcement.

The corresponding covered bond swap agreement for the bonds also will be amended to provide for the early termination of the transactions entered into in connection with the bonds.

To participate in the tender offers for the notes, holders must tender their bonds by 5 a.m. ET on Feb. 26. Settlement is expected to follow on March 3. The tender offers began on Jan. 28.

Pricing for the offers will be set at 8 a.m. ET on Feb. 23 using a benchmark security plus a purchase spread of 0 basis points.

Holders who tender their bonds by 5 p.m. ET on Feb. 10, the early tender date, will receive a premium of 1% for the 2¾% bonds and of 0.50% for the 4 7/8% bonds.

The reference security will be the Swiss 3% notes due May 2019 for the 2¾% bonds and the DBR 4¼% bundesobligation due July 2017 for the 4 7/8% bonds.

The reason for making the offers “is to facilitate the accelerated release of mortgage assets held within the company’s €15 billion covered bond program to allow future portfolio sales and, potentially, the early wind-up of the program, avoiding ongoing administration costs and obligations,” the previous release noted.

The purchase price will equal the value of all remaining payments of principal and interest on the bonds up to and including the maturity date, discounted to the settlement date at a discount rate equal to the purchase yield minus accrued interest.

The dealer managers are BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com) and Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com).

The tender agent is Citibank, NA, London Branch (+44 20 7508 3867 or exchange.gats@citi.com).

Bradford & Bingley is a Bingley, England-based bank.

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